Feb 02, 2025 12:51 PM IST
These companies include Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, Shell, WFA, CVS Health, Mars, Ørsted, and Twitch.
Elon Musk’s social media platform X (Formerly Twitter) is suing advertisers, alleging that they collectively conspired to boycott advertising on the platform after his takeover of the company, Business Insider reported.
These companies include Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, Shell, WFA, CVS Health, Mars, Ørsted, and Twitch.
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The amended complaint filed in a Texas court on Saturday alleges that members of the Global Alliance for Responsible Media (GARM), which is now a defunct initiative from the advertiser trade body the World Federation of Advertisers (WFA), illegally conspired to “collectively withhold billions of dollars in advertising revenue” from X, the report read.
The WFA had previously said it planned to contest the suit and that it was confident in its adherence to competition law, according to the report.
GARM, founded in 2019, was a US-based initiative to provide common frameworks for media owners, advertisers, and agencies to categorize harmful content like hate speech, misinformation, and online piracy. X was also previously a member.
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It then discontinued operations, saying that as a small nonprofit organization, it lacked the resources to fight a previous lawsuit by X.
The latest lawsuit by X alleges that the WFA “organized an advertiser boycott of Twitter through GARM, with the goal of coercing Twitter to comply with the GARM Brand Safety Standards to the satisfaction of GARM.”
The complaint went on to claim that at least 18 GARM members stopped advertising on Twitter in the US or worldwide between November and December 2022. Musk had completed his $44 billion acquisition of Twitter in October that year.
“As a result of the boycott, X became a less effective competitor to other social media platforms in the sale of digital advertising and in competing for user engagement on its platform,” the report quoted the complaint as saying.
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Twitter’s ad revenue plummeted after the takeover with many advertisers leaving after a number of sales and safety staff were let go and controversial banned accounts were allowed back.
The social media platform is now seeking “trebled compensatory damages” and injunctive relief for what it claims are violations of US antitrust laws.
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